Note 2 - Revenue and Product Costs

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

2.          REVENUE AND PRODUCT COSTS

Revenues consist of product revenue and other revenue. Product sales include BolaWrap products and accessories. Other revenue includes VR revenues, service, training and shipping revenues.

The table below details the activity in our contract liabilities during the year ended December 31, 2022.

	Customer			Deferred
	Deposits			Revenue
Balance at January 1, 2022	$	43		$	265
Additions, net		-			301
Transfer to revenue		(43	)		(233	)
Balance at December 31, 2022	$	-		$	333
Current portion	$	-		$	166
Long-term portion	$	-		$	167

At December 31, 2022, the Company’s deferred revenue of $333 thousand of deferred revenue at December 31, 2022, of which $198 thousand related to VR, $11 thousand was related to training and $124 thousand related to BolaWrap extended warranties and services. At December 31, 2021, the Company’s deferred revenue of $265 consisted of $172 related to VR training and $67 related to extended warranties and services.

The Company recognizes an asset if there are incremental costs of obtaining a contract with a customer such as commissions. These costs are ascribed to or allocated to the underlying performance obligations in the contract and amortized consistent with the recognition timing of the revenue for any such underlying performance obligations. The Company had no such assets at December 31, 2022 and 2021. The Company will apply the practical expedient to expense any sales commissions related to performance obligations with an amortization of one year or less when incurred within selling, general and administrative expense.